Detroit's two pension funds have asked the U.S. Court of Appeals for the Sixth Circuit to hear an expedited appeal of a judge's ruling that the city is eligible for bankruptcy protection, Reuters reported on Friday. The General Retirement System and the Police and Fire Retirement System, Detroit's two largest unsecured creditors, filed the appeal with the Sixth Circuit on Thursday. The expedited appeal would bypass the U.S. District Court for the Eastern District of Michigan. Earlier this month, Bankruptcy Judge Steven Rhodes ruled that Detroit met the federal requirements for bankruptcy because the city, with $18.5 billion in debt, was insolvent and could not negotiate with all of its creditors. Judge Rhodes also ruled that pension benefits could be cut as part of Detroit's restructuring efforts. The pension funds, and others objecting to the Detroit bankruptcy, have maintained that Michigan's constitution protects pensions from being slashed. In its appeal, the pension funds argued that Detroit's plan to cut pensions could set a precedent and cause other troubled U.S. cities to also cut pension benefits as a way to reduce debt.
